Bitcoin traders using up to 100-to-1 leverage are driving the wild swings in cryptocurrenciesBitcoin’s aggressive moves are being driven by much more than the next China crackdown or Elon Musk headline.
Traders taking excessive risk in the unregulated cryptocurrency market being forced to sell when prices go down were in large part responsible for last week’s 30% drop in prices and outages for major exchanges, according to analysts. A burgeoning bitcoin lending market is also adding to the volatility.
The price of cryptocurrencies tanked last week, with bitcoin losing roughly a third of its value in a matter of hours. Bitcoin popped to nearly $40,000 on Monday but is still down about 33% from its high.
When traders use margin, they essentially borrow from their brokerage firm to take a bigger position in bitcoin. If prices go down, they have to pay the brokerage firm back in what’s known as a “margin call.” As part of that, there’s often a set price that triggers selling in order to make sure traders can pay the exchange back.
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https://www.cnbc.com/2021/05/25/bitcoin-crashes-driven-by-big-margin-bets-new-crypto-banking.html
If not Elon or China can this truly be traders themselves, if this is true then we are trading using emotions!